Banks Talks Tech

By C.J. Baker

Much has been written about our growing dependence on foreign oil, the limits of oil reserves in the world, and the fuel economy of today’s vehicles. Depending on who you want to believe, we’re either running out of oil at an alarming rate or technology will save us as it always has. Of course, our diesel fuel is currently a product refined from crude oil, so the use of diesel fuel is considered part of the problem, or part of the solution, again depending on your point of view. Chances are the truth lies somewhere in between the extreme opinions on either side. But what if we could tap into a previously unavailable supply of clean-burning, sulfur-free diesel fuel that would last far into the foreseeable future? Here’s the good news. We can.

What we’re talking about is synthetic diesel fuel, which is different from biodiesel fuel. Synthetic diesel is made by reconfiguring another hydrocarbon fuel, natural gas, into liquid diesel fuel. Biodiesel, by comparison, is chemically produced from any fat, such as vegetable oil, soybean oil, or even recycled restaurant greases (see "The Biodiesel Alternative" elsewhere on this site).

Although virtually nothing has been said about it in the news media, synthesizing diesel fuel from natural gas is possible through gas-to-liquid (GTL) technology known as the Fischer-Tropsch process. Such synthetic diesel is sometimes called GTL diesel or FTD (Fischer-Tropsch diesel). The process converts natural gas into diesel fuel. Although other petrochemical products can also be synthesized, diesel fuel is the most economical product. This technology was developed in 1923 and used by the Germans during World War II to produce diesel fuel for its military vehicles. Extensive work has been done to refine this process to make it more efficient and practical, but through most of the time since World War II, diesel fuel has been cheaper to refine from low-priced crude oil. Now, with the need to produce ultra low sulfur diesel (ULSD) to make diesel engines environmentally acceptable (see "Diesel Evolution" and "About Diesel Fuel" elsewhere on this site), and our desire to reduce our dependence on Middle Eastern “sweet crude”, producing synthetic diesel fuel is becoming economically attractive. Better still, the United States has huge reserves of low-priced natural gas (from Alaska or off shore) that can be used for the process, so our diesel fuel could become an all-American product.

There are many positive aspects to generating synthetic diesel fuel. First, the man-made fuel would be sulfur-free and free of other petroleum by-products that are part of diesel refined from crude oil. This means synthetic diesel can be especially clean burning, and can be formulated for good cold weather performance and fuel system lubricity. Because synthetic diesel would be devoid of undesirable contaminates, it can potentially offer lower toxicity. Because synthetic diesel has a high cetane value, like octane for gasoline, it can offer better performance too. The natural gas used for synthesizing diesel would most likely be taken from remote areas that are now considered impractical to develop. The synthetic diesel fuel can then be distributed through the existing petroleum infrastructure.

Synthetic diesel has the same storage life as regular diesel. As with all ULSD, synthetic diesel can be easily contaminated with sulfur from storage in tanks previously used to store regular diesel, although such contamination decreases with time and use. Today, pure synthetic diesel is not readily available, but that too will change with time and demand.

The production of synthetic diesel is relatively expensive, especially considering the capitol investment in new production plants. Consequently, to keep the price of the final product as low as possible, the GTL plants need to be located close to abundant supplies of low-priced natural gas. Such supplies are currently found in only a few remote places in the world. With increased production capacity, the price of synthetic diesel should become more cost effective, perhaps approaching future diesel prices. Currently, synthetic diesel fuel is expected to cost 20-50 cents more per gallon than today’s conventional No. 2 diesel.

Is this really viable? Yes. Part of the diesel fuel used in South Africa is synthetic.

In the last 10 years, most major American oil companies announced plans to build GTL plants to produce diesel fuel. Discussions are underway to develop a GTL production facility in Alaska to produce 40,000 barrels of synthetic diesel per day, with a goal of producing 300,000 barrels per day. With existing technology, oil pipeline capacity, and North Slope natural gas reserves, eventual production of over 1,000,000 barrels per day is possible. In fact, if you operate a diesel on the West Coast, you may already be using a diesel fuel that has some synthetic diesel blended into it. In time, it is possible that all of our diesel fuel will be synthetic, whereas most gasoline will still be refined from crude oil. This could greatly reduce our dependency on foreign oil. American-made synthetic diesel could give a completely new meaning to “Buy American”.